Hello, this is Greedy All-Day.
Before the Nasdaq’s movements beginning on December 23rd, let’s dive into a weekend analysis to prepare for the upcoming market conditions.
Weekly Chart Analysis
The weekly Nasdaq chart presents a rare occurrence—a bearish candlestick after a significant upward trend. Interestingly, the length of both the upper and lower wicks is quite balanced, resulting in a large Doji-like candlestick. However, a Doji candlestick doesn’t necessarily signal a trend reversal to the downside.
Why?
The Ichimoku Cloud’s Lagging Span remains above the candlesticks. Unless we see significant bearish momentum, the Lagging Span is likely to find support from the candlesticks below.
The price is still holding above the 20-week moving average, which currently sits at 20,503.
A bearish move into the Ichimoku Cloud would require the price to drop further to 19,383 to fully enter the cloud zone.
In conclusion, the weekly chart suggests that the uptrend is still intact. Despite closing the week with a bearish candle, it followed a recent all-time high. This could indicate a temporary pause rather than a definitive reversal, keeping the potential for further upward movement on the table.
Daily Chart Analysis
Examining the daily chart, the Lagging Span still remains above the candlesticks, reinforcing that a trend reversal is not yet confirmed.
Additionally, the long-term upward trendline remains intact. For a decisive breakdown to occur:
The price would need to break below the thick Ichimoku Cloud (zone between 20,775 and 19,880).
A definitive trendline breach would likely occur if the price falls below 19,560, which would signal a clear shift in momentum.
At this stage, the daily chart reflects resilience within the broader uptrend despite recent pullbacks.
1-Hour Chart Analysis
The 1-hour chart reveals why Nasdaq’s current direction is ambiguous.
Resistance Zone (Orange Box): This is the final key resistance trendline. A breakout above this level would provide a clear buy signal, as the price would enter the red box supply zone.
If this resistance is overcome, Nasdaq has a high probability of testing the red box’s upper boundary near 22,432, potentially forming a double top or even reaching a new all-time high.
Friday’s session did see a rebound, but:
While the yellow box resistance was broken, the price failed to hold support near the session close, which casts doubt on the strength of the rebound.
To confirm further upside momentum, the price needs to break above the blue box resistance near 21,935.
Without reclaiming this level, the strong bearish candlestick from Friday’s session raises skepticism about whether this was a genuine reversal or merely a temporary relief rally.
Final Thoughts
Historically, markets have often rallied during the holiday season, but this year appears to present more complex conditions. Instead of trying to predict the market, focus on reacting to key levels and signals.
I will continue to provide detailed and actionable analysis to assist you in navigating these challenging markets. Stay prepared and trade wisely!